Richmond Fed’s Barkin Affirms No Rush to Cut Rates Amid Inflation Risks

Richmond Federal Reserve President Thomas Barkin emphasized that there is no urgency to cut interest rates amid ongoing inflation risks and a resilient U.S. economy, with unemployment steady at 4.2% and consumer spending stable. Barkin highlighted that inflation remains above target, and the impact of new tariffs—expected to increase prices later this year—adds uncertainty, warranting a cautious, patient approach without rushing rate cuts. He stated that the Fed should maintain a modestly restrictive policy stance to address inflation while observing the effects of trade policy developments, especially as the Trump administration has set a July 9 deadline for trade agreements or higher tariffs. Barkin's views contrast with Fed Governor Christopher Waller, who supports starting slow rate cuts as early as July. The division among Fed officials reflects uncertainty about the timing and extent of future rate cuts, with some expecting none this year and others anticipating multiple reductions. Barkin also dismissed President Trump's calls for immediate rate cuts, underscoring the importance of data-driven decisions rather than political pressure.